Sanctions are reportedly hurting Russia's economy and Ukraine war aims, and new oil caps could hit harder
Russian President Vladimir Putin claimed for months that Western-led sanctions imposed over his invasion of Ukraine had failed, but even he now seems to recognize the economic fallout on Russia's economy and war effort. "Recent figures show the situation has worsened considerably since the summer when, buoyed by a steady stream of oil and gas revenue, the Russian economy seemed to stabilize," The Washington Post reports, citing economists, Russian business executives, and official Russian statistics showing steep drops in non-oil tax revenue and retail sales.
"All objective indicators show there is a very strong drop in economic activity," Vladimir Milov, an dissident former Russian deputy energy minister, tells the Post. "The spiral is escalating, and there is no way out of this now."
"The Western ban on technology imports is affecting most sectors of the economy, while the Kremlin's forced mobilization of more than 300,000 Russian conscripts to serve in Ukraine, combined with the departure of at least as many abroad fleeing the draft, has dealt a further blow," the Post reports. Putin has also effectively cut natural gas production by limiting exports to Europe.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Moscow's oil revenue could take a further hit when the European Union bans most Russian crude imports and, with the U.S. and other allies, impose price controls on most Russia oil exports by limiting shipping, trading, insuring, and financing Russian oil shipments anywhere that agrees to pay more than a set price. Those combined measures, set to take effect Dec. 5, could deprive Russia of at least $120 million per day in lost revenue, Milov told the Post.
But the damage to Russia will be determined by how low the EU and U.S. set the price cap, how Russia responds, whether OPEC+ cuts crude production, and how soon China's depressed demand for oil recovers after COVID-19 lockdowns, The Wall Street Journal reports. Russia has already cut its oil prices to entice wary buyers.
And U.S. sanctions, combined with Ukraine's "courage and ingenuity," have already made a "real difference" on Russia's ability to conduct its war in Ukraine "in any modern terms," U.S. Ambassador Jim O'Brien, head of the State Department's Office of Sanctions Coordination, told CNN on Sunday. "You see the communications are lacking. Precision weapons. Rapid movement of troops. So it's fighting a different kind of war," with vastly scaled-back ambitions.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
Today's political cartoons - March 16, 2024
Cartoons Saturday's cartoons - pointed commentary, Haiti in trouble, and more
By The Week US Published
-
5 hilarious cartoons about the RNC's MAGA takeover
Cartoons Artists take on RNC funding, Lara Trump, and more
By The Week US Published
-
Trump's presidential run: a bad bet for Republicans?
Talking Point The GOP is taking a 'big gamble' on former president's 2024 White House bid
By The Week UK Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published
-
Immigration helped the US economy outpace peers
speed read The U.S. economy grew at an annualized rate of 3.2% last quarter
By Peter Weber, The Week US Published
-
4-day workweek gets boost from UK study
Speed Read Following a six-month trial, the majority of participating British companies are still using the truncated schedule
By Peter Weber, The Week US Published
-
North Korea's stranded migrant workers
The Explainer Hermit kingdom sent labourers overseas to fund cash-starved regime and weapons programme, but shut borders during pandemic
By Harriet Marsden, The Week UK Published
-
US sues to block Kroger-Albertsons merger
Speed Read The Federal Trade Commission sued to block the $24.6 billion merger between the grocery giants
By Peter Weber, The Week US Published
-
Nvidia sees historic stock rise on AI chips success
Speed Read U.S. chipmaker Nvidia achieved the biggest one-day increase in value of any company in history
By Peter Weber, The Week US Published
-
New York may seize Trump's assets for $450M penalty
Speed Read The former president likely owes $600 million from two civil judgments in New York
By Peter Weber, The Week US Published
-
Capital One to buy Discover for $35B
Speed Read The deal, if cleared by regulators, would create the biggest credit card lender in the country
By Peter Weber, The Week US Published